Table of Content

15 June 2017, Volume 0 Issue 06

Previous Issue    Next Issue

A Study of the Relationship between Tax Rate Adjustment, Corporate Tax Avoidance and Enterprise Value: Empirical Evidences from 2008 Enterprise Income Tax Reform

CAI Lei, SU Wen-bing, LI Xin-he

2017, 0(06):  257. 

Asbtract ( 205 )  

Related Articles | Metrics

In the context of the implementation of the new enterprise income tax law since 2008, this paper takes the A-share listed companies from 2003 to 2012 as the research objects to conduct an empirical study of the relationship between tax rate adjustment, corporate tax avoidance and enterprise value. The findings suggest that: (1) after the tax reform, the companies with increased tax rate would significantly improve the degree of tax avoidance, while the companies with decreased tax rate would have significantly lowered degree of tax avoidance, and the companies without changes of tax rate would remain the same as usual; (2) within the five years after the tax reform, the companies with increased tax rate present an inverted U-shape change of tax avoidance, reaching the peak in the third year, while the companies with decreased tax rate would decrease their tax avoidance year after year during this period; (3) the correlation between corporate tax avoidance behavior and enterprise value is affected by the income tax rate applied to the enterprises, which is further affected by the direction of tax rate adjustment during the tax reform. After the tax reform, the companies with increased tax rate would significantly reduce enterprise value due to their tax avoidance behaviors, while the companies with decreased tax rate would significantly increase enterprise value due to their tax avoidance behaviors. Therefore, the tax rate adjustment can produce a certain degree of impact on the investors’ value judgment of enterprise tax avoidance.

The Impact of Alumni Relation between Senior Managers and CPAs on Audit Opinions: Evidences from China’s Securities Market

XIE Sheng-wen, LI Yuan-yan

2017, 0(06):  258. 

Asbtract ( 187 )  

Related Articles | Metrics

By selecting the A-share listed companies from 2005 to 2014 in Shanghai and Shenzhen stock markets as samples, this paper studies the impact of alumni relation between the executives of listed companies and the CPAs on audit opinions. The result shows that the companies having alumni relation between the executives and the CPAs are more likely to obtain the standard audit opinion for that year. Further analysis shows that when the accounting firm is changed, and the alumni relation between the executives and the CPAs also changes from non-existence into existence, the listed company is likely to realize the purchase of audit opinion in the year of changing. And the listed company with such alumni relation between the executives and the CPAs may pay higher audit fee. These findings provide empirical evidences for the influence of alumni relation on external independent audit; therefore, the investors and the supervision departments should pay more attention to the impact of soft factors, such as nepotism and so on, on audit quality.

Trade Liberalization, Financing Constraints and Enterprise Innovation: An Empirical Study of China’s Manufacturing Enterprises

ZHOU Feng-xiu, ZHANG Jian-hua

2017, 0(06):  259. 

Asbtract ( 191 )  

Related Articles | Metrics

Under the analytical framework of heterogeneous enterprises, this paper constructs a theoretical model of trade liberalization and innovative decision-making of enterprises under different degrees of financing constraints. The results show that along with the deepening of globalization, the heterogeneity of financing constraints in different firms is continuously expanding. The enterprises with higher degree of financing constraints can hardly obtain external financing support, so that the stimulation for technological innovation is greatly reduced. The empirical results with enterprise data of China’s manufacturing industry show that financing constraints can weaken the motivating effect of trade liberalization on technological updating and that the incomplete capital market would restrict the gains from trade brought about by trade liberalization. Thus in the situation of speeding up the construction of open economic system, the government should improve the financing environment for the enterprises as soon as possible, so as to maximize the opportunities of trade liberalization and stimulate enterprises’ innovation vitality.

Market Potential, Trade Openness and Industrial Diversification: An Empirical Study Based on Provincial Panel Data

ZHANG Liao

2017, 0(06):  260. 

Asbtract ( 167 )  

Related Articles | Metrics

This paper makes a theoretical analysis of the impact of market potential and trade openness on regional industrial diversification. Then it makes use of the panel data of China’s 30 provinces in the period of 2000-2014 to conduct an empirical test. The findings show that the improvement of both the regional market potential and the trade openness has a positive impact on the level of regional industry-unrelated diversification, while a significant negative impact can be found on the level of the industry-related diversification. That is to say, the improvement of market potential has formed the diversification of demands, directly leading to the agglomeration of a large number of unrelated industries; a higher level of foreign trade and market openness can promote the space agglomeration of a large number of unrelated industries, while at the same time, restraining the space agglomeration scale of the related industries. Comparatively speaking, the impact of trade openness on the regional diversifications is more significant. Furthermore, the impact of market potential and trade openness on the diversification presents a relatively significant heterogeneity during the period of stable macroeconomic development and when there is an external impact on the economy; meanwhile, there exist obvious differences in the marginal effects of industrial diversification at different regions.

WeChat Official Account: A Bridge between Consumers’ Attention and Brand Emotion

YIN Shi-min, NIU Yong-ge, LI Wei

2017, 0(06):  261. 

Asbtract ( 231 )  

Related Articles | Metrics

This paper adopts such variables as self-expressive brand, brand love, brand loyalty and word of mouth to construct a structural equation model, so as to explore the impact of brand emotions related to consumers’ attention behavior towards brands’ WeChat official accounts and the brand self-expressive nature on brand emotions and word of mouth intention. The results show that consumers have a certain degree of loyalty and positive WOM intention towards their concerned brands, but their brand emotions have not reached the level of ardent love, thus they would maintain a neutral attitude towards the self-expressive attribute of the brand. The variable relations indicate that the inner self attribute and the social self attribute of the self-expressive brands have positive effects on brand love, that brand love has a positive effect on brand loyalty and WOM, and that the inner self attribute has a positive effect on brand loyalty and WOM, while the social self does not. The research conclusions are of great practical value for understanding the online interaction between consumers and brands, identifying the types of brand “fans” and improving brand operation.

The Impact of Individual-Organization Value Fit on Employees’ Suggestions

ZHAN Xiao-hui, YANG Dong-tao, LUAN Zhen-zeng

2017, 0(06):  262. 

Asbtract ( 174 )  

Related Articles | Metrics

Based on value fit theory, this paper explores the relationship between individual-organization value fit and employees’ voice behaviors and the mediation and moderating effects contributed by perceived organizational support and perceived psychological safety respectively. The questionnaire survey method is adopted to conduct a test on the model with 535 copies of the superior-subordinate matching data as the samples. The results show that individual-organization value fit can positively predict employees’ voice behaviors, that the perceived organizational support can play a role of partial mediation in it, and that the perceived psychological safety can play a moderating effect in the relationship between the perceived organizational support and the employees’ voice behaviors, namely, the stronger the perceived psychological safety, the stronger the effect of perceived organizational support on employees’ voice behaviors, or vice versa.

Reflections on Local Financial Disassimilation: Fiscal Anomy, Capital Disorder and Financial Structure Distortion

LV Cheng-gang

2017, 0(06):  263. 

Asbtract ( 188 )  

Related Articles | Metrics

To have a panorama scanning of the generate path of local financial disassimilation can not only help to analyze and resolve the plight of local financial development but also help to achieve a breakthrough in the development of local finance. The disordered development of China’s financial industry is the result of the deviation of China’s actual economic status from the expected economic status. The lack of China’s mainstream financial functions is resulted from the anomy of fiscal decentralization pattern, the disorder of private capital regulation and the imbalanced development of the financial structure. The economic transition, the financial game between central government and local governments and the interest demands of all parties also contribute to the realistic context of the financial disassimilation. At present, China still has huge needs of investment and financing, which are not digested by the market; these needs can reflect the interest demands of the government and the market. The financial laws in China have not formed a well-ordered path regulation for the informal finance, which is always seeking law-free interests and unlawful interests while narrowing the supply-demand gap between the government and the market. Thus it can be seen that the regulation and adjustment of private finance need not only the improvement of the financial legal system and related supporting systems, but also the rational distribution of the central and local finances.

Political Connections and Financing Constraints of High-Tech Enterprises: Based on an Empirical Test with Dynamic Panel GMM Model

XIONG Jia-cai, GUI He-fa

2017, 0(06):  264. 

Asbtract ( 191 )  

Related Articles | Metrics

Based on the dynamic panel GMM model, this paper studies the impacts of political connections on the financing constraints of high-tech enterprises and its action mechanism. The findings show that the high-tech enterprises with political connections are faced with fewer financing constraints. Compared with large-scale enterprises, state-owned enterprises, loose monetary policy periods, and the high-tech enterprises located at areas with weaker government intervention and higher degree of financial development, the financing constraint alleviating effect brought about by establishing political connections is more significant for small-scale enterprises, private holding enterprises, the tight monetary policy periods, and the high-tech enterprises located at the areas with stronger government intervention and lower degree of financial development. Further analysis finds that political connections could alleviate the financial constraints faced by high-tech enterprises mainly through the two mechanisms: i.e., to reduce the information asymmetry in the credit market and to obtain more scarce resources, such as government subsidies, bank loans and equity financing.

Will Soft Budget Constraints Really Reduce the Total Fiscal Efforts of Local Governments?

ZHANG Rui

2017, 0(06):  265. 

Asbtract ( 158 )  

Related Articles | Metrics

In recent years, local governments are faced with fiscal deterioration, while the transfer payment of the central government has further led to inefficient public expenditures. This paper makes use of the panel data of China’s 29 provinces during the period of 1996-2015 to conduct an analysis. The findings show that soft budget constraints have indeed reduced the financial efforts of the local governments to a certain extent. Especially before the new Budget Law, the local governments would expand their expenditures due to the excess revenue, which could seriously reduce the local financial efforts. The amendment of the Budget Law provides a clearer and fairer calculation method for the collection and distribution of tax money, which can reduce the inducement on the local governments to increase public expenditure by striving for funds from the central government, thus relieving soft budget constraint problem to a certain degree. Therefore, it is suggested that we should carry out and implement thoroughly the new Budget Law, give full play to the market mechanism, take advantage of the competition supported by the society and the capital market disciplines to enhance the hard budget constraints, remove the overlapping responsibilities between governments, and carry out strict classified control on local government expenditures and debts.

News, Housing Price and Monetary Policy

CHEN Li-feng

2017, 0(06):  266. 

Asbtract ( 171 )  

Related Articles | Metrics

From the perspective of news shock, this paper discusses in detail the impact of the news shocks related to the loan-to-value ratio and the unanticipated shocks on China’s real estate market with the dynamic stochastic general equilibrium model, which contains the real estate market. It also compares the dynamic effects produced by the news shocks and the unanticipated shocks under different monetary policies. The results can be concluded as following: (1) there exist significant differences in the macroeconomic effects between the news shocks and unanticipated shocks; (2) news shocks can drive the real housing prices upward persistently through the expected self-fulfilling mechanism; (3) in the context of news shocks, the monetary policy that takes the real housing price as the pegged target has much better stabilizing effects than the monetary policy that pegging the mixed price index. Therefore, the government should guide the public to form correct expectations and take the real estate prices as the pegged object of the monetary policy, so as to achieve the goal of stabilizing the real estate market by taking advantage of the effects of positive news shocks.

Can Economic Policy Uncertainty Influence the Effectiveness of Monetary Policy? From the Perspective of Credit Channel

DUAN Mei

2017, 0(06):  267. 

Asbtract ( 214 )  

Related Articles | Metrics

Based on the economic policy uncertainty index of China compiled by Baker et., this paper empirically examines the relationship between economic policy uncertainty, monetary policy and enterprise credit allocation. It further explores the impact of economic policy uncertainty on the effectiveness of China’s monetary policy from the angle of the micro-level. The findings show that: (1) the rising of economic policy uncertainty would inhibit enterprises’ newly increased loans, especially leading to the decrease of the newly increased short-term loans; (2) higher economic policy uncertainty would result in the decrease of the regulating effect of monetary policy on the enterprises’ credit financing, in turn the effectiveness of China’s monetary policy is lowered. Furthermore, the effects of economic policy uncertainty on state-owned enterprises and non state-owned enterprises are quite different.

Fiscal Transparency, Fiscal Management and Good State Governance: A Theoretical Analytical Framework

YANG Ya-qin

2017, 0(06):  268. 

Asbtract ( 166 )  

Related Articles | Metrics

To improve fiscal transparency can affect the core of state governance -- fiscal management -- and further affect the level of the state governance. The paths by which fiscal transparency affect fiscal management mainly include: to control the financial scale from the two ends of income and expenditure; to enhance the financial efficiency from the two aspects of the budgeting efficiency and the public fund management efficiency; to improve the financial safety from such aspects as debt scale, aged failure of debts, debt costs, debt information disclosure, public confidence, etc. In order to promote the realization of good state governance ultimately, the following steps should be taken: firstly, to publicize full-aperture government income-expenditure information, government comprehensive financial reports, mid-term rolling budget, and government debt information entirely, truly and timely, so as to improve fiscal transparence; secondly, to clarify the subject, time, procedures and methods of government financial information disclosure, so as to improve the accessibility of financial information; and thirdly, to improve the supporting system for fiscal information disclosure from such aspects as perfecting the legal system, constructing the data network platform for financial information disclosure, and so on.